Use Figure 2 to show that Adam Smith was wrong when he claimed that a monopoly would always charge “the highest price which can be got.” General Motors declared bankruptcy in 2009. If it goes out of...

Use Figure 2 to show that Adam Smith was wrong when

he claimed that a monopoly would always charge “the

highest price which can be got.”

General Motors declared bankruptcy in 2009. If it goes

out of business altogether, why might that not reduce

the competition facing rival automaker Ford? (Hint: At

what price would the assets of the bankrupt companies

be offered for sale?)